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ISTAT: Jeju Air targets 40 aircraft by 2019

Jeju Air plans to grow its fleet of Boeing 737-800s to about 40 aircraft by 2019, says its director of planning Hyuk Park.

The South Korean low-cost carrier will have 26 aircraft at the end of 2016, and plans to add four to five aircraft to its fleet annually for the next three years, says Park at the ISTAT Asia conference in Tokyo on 18 May.

“We will try to maintain a 20% growth [rate] for the next five years."

Jeju operates 24 -800s, all of which are on operating leases, Flightglobal’s Fleets Analyzer database shows. It received its latest aircraft, registered HL8063 (MSN 37519), from SMBC Aviation Capital in April.

Leases for the two additional 737s due this year are in the market, says Park. He declines to say which lessors will provide the aircraft, except that they work with “everybody”.

Asked if Jeju could take any of the -800s that Gol is selling to lessors, Park says no, but points out an opportunity in the deals. For example, the aircraft could put pressure on lease rates, allowing Jeju to acquire additional aircraft at favourable terms.

Brazilian LCC Gol has reduced its deliveries of new 737s to just one through 2017, following worsening economic conditions in the South American country. It had previously planned to take 15 aircraft during the period.

Aircastle and FLY Leasing have purchased new -800s without leases from Gol since the beginning of 2016.

Jeju will continue to lease used -800s with six- to eight-year vintages as it grows its fleet in the coming years, says Park.

The carrier expects the -800 to perform well and retain its value even as the 737 Max is introduced, judging from the strength of the 737-300 against the 737-700, after the latter was introduced in 1998.

Jeju also has no plans to acquire the larger 737-900ER, since the airline is focused on having the "simplest operation" possible.

"We don’t think that’s something we can afford at this time," adds Park.

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